Apollo Education Group, Inc. (NASDAQ:APOL)

The Company is an education provider for more than 30 years and operates through subsidiaries: The University of Phoenix, Inc., Institute for Professional Development, The College for Financial Planning Institutes Corporation and Western International.

1.D. The institution’s mission demonstrates commitment to the public good.

1. Actions and decisions reflect an understanding that in its educational role the institution serves the public, not solely the institution, and thus entails a public obligation.

2. The institution’s educational responsibilities take primacy over other purposes, such as generating financial returns for investors, contributing to a related or parent organization, or supporting external interests.

For Profit Universities are having a tough time recruiting students because of the restrictions in bank loans and subsidies. Another main worry is academic, there is always the fear of losing your regional or national accreditation which will make your degrees more or less just a piece of paper

They were able to fool a lot of students to enroll in before but lets remember this: they got students to come using a lot of advertising. Almost 30% of their revenue was spent on advertising. This is why the school enrolls more percentage of uneducated minority students than any other non-profit schools. Not only that, lets bring up some facts: about 90% of their revenue is from government grants and loans. Any investor knows that what the government gives, they can take away. Look at solar energy as an example! Students who attend for-profit universities have higher unemployment rate, higher drop out rate, and receive about 8-10% less income compared to similar students who attended non-profit universities. Not only that they have higher loan default rates which is really hidden by lobbying, they claim default is about 20% but the true number is about 50%. Compared to their counterparts who attend non-profit universities, they face a TERRIBLE life. Though they were able to enroll a lot of students before, with a lot more education and resources out there, it will be harder to enroll more students in the future.

As students become more knowledgeable about the effects of "bad school debt" you'll see lesser margins in companies such as APOL as overall school enrollment will steady and people will not look to APOL or others as potential areas to increase their job marketability.

Not as cheap as ESI or LINC which I'm also bullish on but has a better established brand name and is the recognized innovator in the field of online education. If people want to go to school online, they usually think "university of phoenix online".

You ever get a speeding ticket? Did you elect to go to online traffic school to avoid the "points" against your license?

These guys almost certainly got a cut.

Online learning is big business; not only do they have 315,000 full-time and part-time enrollees, they make a lot of money off these one-shot deals. You've probably taken one of their classes and not even known it.

This is one of my long time favorites, and luckily for value finders this stock tanked from a high.

Great ROE and profit margins stem from the fact that this business generates money with little expenditures... just the way Buffet likes it.

The nice thing is education is valued in both recessions and expansions: in recessions it's the way to get a leg up so that a job is attainable, in expansions it's just an extra credential. Brand name (University of Pheonix) is good.